More Consolidation In The M-Gaming Industry

At the start of the century, mobile gaming was a garage-based development effort, where many small companies built rudimentary WAP games using ASCII characters. It didn't take long for the complexity to shoot up, and the games to become a richer in color and scope, however, the market (especially US) was still characterized by smallish companies who could get direct access to carriers because even the big carriers needed content for their mobile services. But in a quick few years, all that has changed. A garage developer today has no chance of getting a sit-down with Verizon Wireless, and the carriers are trying to reduce the number of content companies with whom they directly connect. Thus, aggregators have appeared in the mobile space - these are often the more successful development firms, who are finding that their relationships with carriers are as valuable as the applications they are making themselves. They can buy up smaller developers, or aggregate their content and distribute it to the carriers. No surprise, then, that the smaller developers are being marginalized, and the only way to be a significant player in the m-gaming sector is to grow fast. By today, most of the winners are already emerging. To use a Geoffrey Moore analogy, the tornado has already formed, and there are some companies emerging that appear to have won the necessary momentum to achieve long term success. We expect much more consolidation as the winners get more cash flow, and attract more capital, and the losers start to take stock and realize that a quick sale is their best exit strategy. So, just to provide a case in point, London-based Enpocket announced the purchase of Iceland-based Landmat. Landmat was a moderately successful development house that had deals with, Discovery Channel and Time Out. Enpocket started as an SMS marketing specialist, but has since broadened out their reach with a series of acquisitions in the US, Japan, and elsewhere.

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